Pensions industry hits out at VC slur

It's not to be sneezed at, says Mandelson

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The National Association of Pension Funds (NAPF) has hit back at the Trade and Industry secretary Peter Mandelson, accusing the government of being responsible for the lack of venture capital investment in the UK. John Rogers, NAPF's director of investment services, said it was the government's total lack of "joined-up policy" on pensions that was behind the UK's poor track record on venture capital investment. Rogers was speaking out after Mandelson attacked pension funds for not investing more in high-technology start-up companies (see SoS hits out at VCs). Speaking in the Financial Times, he said that scrapping tax credits on dividends had reduced the attractions of shares relative to bonds. But Mandelson is adamant that it is up to the pensions industry to lead the way. It only takes a relatively small increase in the proportion of funds to have a significant impact on the economy, he said today. "Given the size of their portfolios, they only have to sneeze and you have enough money to finance hundreds of these new companies." In the US, more than five per cent of pension fund money goes into venture capital but in the UK, that figure is just 0.75 per cent. ®